Capitalizing on Rural America

Conference seeks creative ways to deal with globalization. John Otte

Published on: Apr 19, 2004

"Rural America has great opportunities. Technology is bringing a whole new horizon of economic opportunity," says Mark Drabenstott, vice president, Kansas City Federal Reserve Bank. "But regions will have to find their own niche. Public policy will have to be much more flexible in supporting the unique solutions that regions pursue."

Sen. Tom Harkin, D-Iowa, sees a bio-industrial revolution coming that will make the industrial revolution look minor. "You want your oil and your grease produced from soybeans, not petroleum. You want your plates and paper products produced from bio-based products, not petroleum. You don't want to be filling up your land fills all of the time.

"You want it sooner because you want your kids and your grandkids to have a healthier lifestyle, cleaner air and cleaner water and more security for our country," he adds.

Those are two summaries of a panel discussion on Capitalizing on Rural America sponsored by the Federal Home Loan Bank of Des Moines, Iowa last week.

Rural America is more than agriculture

Agriculture powers rural America. But rural America is much more than farming. Both agriculture and the rest of rural America operate in a world that is rapidly globalizing. Both face challenges on how to thrive and prosper in a rapidly changing economic environment.

More than 20 million Americans live in rural America. The United States has about 1.9 million farmers. That means the vast majority of rural Americans earn their living off the farm. They need jobs. They need education and opportunities to find those jobs.

Commodity agriculture won't cut it

"If we play the game of the lowest common denominator, the lowest common denominator is always price. Commodities will go down and down and down," says Ernesto Sirolli, CEO of the Sirolli Institute, Sacramento, California, "In the end we will never be able to compete with the Chinese farmer because now the Chinese farmer will use the most exquisite technology which is developed in America."

"We need to add value to food to get to sell it dear, not cheap," he states.

J. Erik Fyrwald, vice president, Dupont Agricultural and Nutrition Platform, sees a technological edge. "New technologies are creating all kinds of opportunities," he says. "Farmers in Midwest are adopting those technologies faster than anywhere else in world. We can start to address problems of food quality, obesity and energy. In the future we won't take raw materials from oil and gas. We'll get them from plants."

Need big picture view

"Rural America is complicated. We need a creative vision for what Rural America should look like," says Terry Jorde, president CountryBank USA, Cando, N. Dak. "We need to set goals. We need to develop a master plan that looks at rural America as a whole, looks at environmental issues, transportation issues and tax issues."

"Technology, particularly the internet, gives people the resource base to do things in rural community that they used to think could only be done in urban areas," points out Jeff Plagge president, First National Bank, Waverly, Iowa.

Grassroots leadership people are key

Growing a rural business takes someone with a passion for the product. But that's not enough. "It also needs someone with a passion for the business plan and a passion for finance," says Sirolli. "If you don't have all three, you have to get them or the business won't succeed."

Drabenstott sees the people who are changing the fastest and have the clearest vision of where they are going are those who are place based. They have set geographic base.

"Kicking it off takes a catalyst," he adds. "Catalysts can come from the private sector, businesses or non profits, government or higher education. Our experience to date suggests it's coming from higher education, usually regional local or regional colleges or philanthropic organizations."

Public policies can help grease the rural development wheels. However, no one size fits all policy will do the job.